Practical tips for small biz owners

Archive for October, 2016

Whether it’s the USA election or Brexit, September 11 or Hurricane Katrina, the uncertainty that surrounds world events brings up anxiety in people and changes their behavior, which in turn affects your marketing and sales.

I’ve spoken with several colleagues who are having a difficult time filling autumn classes or getting clients to commit to a contract, where they never had a problem before. These are high-skilled people with long-term reputations for excellent sales and marketing skills.

So I started asking around to see how widespread it is: Are you seeing anything different in your business these past few months?

I’m hearing a chilling response from my colleagues, clients and members: Yes, things appear different over the past few months, with their own businesses and in discussions they’re having with their own colleagues.

One possible explanation is that Americans are feeling extremely anxious about the elections and people in Europe are feeling anxious about Brexit.

Anxiety makes people hesitate before making a big commitment. They second-guess themselves. Many people take a wait-and-see approach when anxiety is high.

What You Can Do

Talk with your customers. While the political events may be important, and so is the rest of their personal and professional life. Reach out to customers and remind them that their dreams and goals will not go away, and instead of freezing in place, they should consider where they can empower themselves to take action. What is one next step they can take that will propel them forward?

For your own business situation, know that these anxieties come and go, and you don’t always have control over them. You can plan for these swings by keeping your finger on the pulse of how your customers are feeling, whether you sell to the general public, or to other businesses. Pay attention to these trends so that you can get ahead of the curve with strategic planning and nimble marketing. (And pay attention to your own reaction to world events – are you freezing in place, too?)

Pay attention to world events through the lens of “How will this make my customers feel and react, and how long will this event affect them?” You don’t want to make pivotal and long-lasting changes in your business and marketing model if your customers will only be affected by an event for a short time.

Where to Keep Your Finger on the Pulse

There are several places you can pay attention to what’s happening with your customers’ feelings and actions.

You can find a monthly consumer confidence index here. Simply scroll down to the Countries menu and select one or more countries to compare their confidence numbers.

Here’s the most recent Stress in America results from the professional association for psychologists, the American Psychological Association. It talks about how adults are feeling about the stress related to the election (in a non-partisan way):

Several major publications regularly interview business leaders about their outlook for their business/industry, and your local Chamber of Commerce may do so as well. Just Google “business leader outlook” to find relevant survey results. (Note: because Google will show you a series of results, even historic ones, you might want to put the current year in your search terms so that you get current results.)

What Do You Think?

What’s happening in your business? Is it steady or have you seen changes? Share your thoughts on my blog.

I know you have a great idea and when you tell others about it, they think you have a great idea, too. A great idea is the birth of a new small business.

But as a self-employed small business owner, you can’t afford to take chances on ideas without getting more information about what your entire market audience wants and what they’re willing to pay for it. Talking to 10 or 20 other people isn’t enough. You’ve got to talk to hundreds.

In the military and in NASA, they use a term called “ground truth.” While they can observe things via satellite and other distant monitoring devices, nothing beats getting down on the ground and seeing what’s really happening in real life. Here’s NASA’s explanation of how they use Ground Truth when it comes to their space programs.

So, how can you get ground truth about the viability of your business idea? The answer is market research. Market research is a study of your consumer’s preferences and your competition. Sometimes you’ll hear it called a “feasibility study.”

Through in-person interviews and online surveys, literature research, internet research, and other information gathering techniques, you can learn the trends in your industry, as well as individual preferences of your potential customers. If you’re in a well-defined industry, like toy manufacturing or massage therapy, you might find that your national professional organization has already conducted research studies on behalf of the members of the organization.

Why is market research necessary?

Because we all have different tastes, different ideas about what’s important in our lives, and different ability (or willingness) to pay a particular price for what we want. Often the small business owner thinks they have a great idea for a new product or service, only to discover that people either don’t want that service or product, or they’re not willing to pay the price that the small business needs to set in order to be profitable.

Sometimes they discover, joyfully, that not only do people want this new product or service, but that these same people can suggest other new products and services that would work well with the new idea, allowing the small business owner to see future growth into new areas. Or maybe they discover through their market research that if they made a small change in their product or service, for instance, making a product with a red cover instead of a blue one, that people would buy it more often.

Another purpose of market research is to discover what your competition is doing. Say that you want to create a new type of office product and you think your idea is unique. Take a look at what’s on offer at the Staples, OfficeMax and Office Depot websites, and you might discover that your competitors have already created a product to solve the same problem as your product solves. Does that mean you should then give up the idea entirely? No, not necessarily. What it means is that you now have some ground truth about what you’re up against if you want to go head-to-head with these competitors.

You need to know the ground truth about your ideas before you spend countless hours and money taking a new product or service to market.

I know that it feels like it’s putting a damper on new business idea creation, but in fact, it’s just the opposite: I’m encouraging you to find out what your customers want, and what they will pay for it, so that you can ensure future success.